An Overview of Central Public Sector

Enterprises in India
Dr. S.MD. GHOUSE
Prof. and Head
Department of Management Studies
Gates Institute of Technology
Gooty, Anantpaur Dt., Andhra Pradesh
Ph: +919177331948
e-mail: ghouse.marium@gmail.com

B. RAGHAVENDRA PRASAD
Assistant Professor
Department of Management Studies
Gates Institute of Technology
Gooty, Anantpaur Dt., Andhra Pradesh
Ph: +919440732770

Dr. B. ABDUL AZEEM

Assistant Professor
Department of Business Administration
Annamacharya PG College of Computer Studies
Rajampet, Kadapa Dt., Andhra Pradesh
Ph: +919704898978
e-mail: abdul_azeem@indiatimes.com

ABSTRACT
Government of India has leveraged the public sector enterprises to achieve desired
socio-economic objectives. Profits made by public enterprises are utilized towards financing
the economic development of the country. Thus the purpose for which an industry in public
sector is set up is primarily for the welfare of both the workers and the society. Hence, the
performance of the public sector enterprises cannot be evaluated in terms of the criteria used
to judge the performance of private sector enterprises. The basic difference between private
and public ownership is the difference in objectives, viz welfare maximization by the public
sector and profit maximization by the private sector. Hence, based on the critical role played
by these enterprises, time and again there is a need to understand the status of the public
sector enterprises in the country. Thus, the paper aims to present a picture of the public sector
enterprises in India based on the secondary literature available. Different issues related to the
performance of the public sector enterprises is discussed on the backdrop of their contribution
to Indian economy. The paper helps in creating an understanding of the role played by public
sector enterprises in the economic development of the country.
Keywords:
Public sector enterprises, Government of India, Economic development, Economic reforms
INTRODUCTION
The two hundred years of colonial rule had completely crushed the Indian industry
and exhausted the resources at the dawn of the independence. It was felt that political
freedom would not be of much use if economic independence was not achieved. Most private
entrepreneurs had neither the vision nor the capability to undertake heavy investments in core
sector industries having long gestation periods. Moreover, state political leadership had the
ideological conviction that an equitable and socialistic society could be built only by adopting
1

a mixed pattern. It was under these circumstances that the Indian government had to enter
into the business. The main objective of doing so, were to build a base for solid
infrastructure, bring about a planned development of the entire country and improve living
condition of the masses. In many ways, the public enterprises were used as extended arms of
the government for development (Rama Prasad Rao). Public enterprise without a plan can
achieve something; a plan without public enterprises is likely to remain on paper (Hanson,
1954). According to Minhas (1974), securing rapid economic growth and expansion of
employment, reduction of disparities in income and wealth, prevention of concentration of
economic power, and creation of the values and attitudes of a free and equal society have
been among the objectives of all the plans of Indian government. Agriculture & other
activities of the economy were the two limbs of Indian economy which was characterised by
central planning for development and minimum of foreign participation. The economic
reason for the desirability of reforms is that it raises the long run growth rate of the economy.
In the early stages of development planning, the government was viewed as the principal
actor in the development, exercising strict control over private investment and ensuring a
dominant role for the Public Sector in all important industries. Trade policy tended to be
inward oriented focusing on industrial development through import substitution which was
encouraged through a tight control over the imports and maintenance of high tariffs. Reforms
are means to achieve the ultimate goal of economic development of the country and the wellbeing of its people (Kumar, 2000).Though the economic reforms in India have started in
1980s, but it has got logically consistent shape only since 1991. The package of economic
reforms in India consists of (Singh & Kaur, 2003):
1. Deregulation and liberalisation of all markets,
2. Increasing competitiveness in all spheres of economic activities, and
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3. Living with in the means or a strong budget constraint on all economic agents.

The Central Public Sector Enterprises (CPSEs) comprise enterprises established by

the Government of India (GOI) as Government companies under Section 617 of the
Companies Act, and wherein the equity holding of the GOI is more than 50 per cent. It also
includes statutory corporations constituted under specific statutes of the Parliament. The
CPSEs do not, however, include departmental undertakings, banking institutions and
enterprises where equity holding of the GOI is 50% or less (Department of Public
Enterprises, 2007).

EVOLUTION OF PUBLIC SECTOR IN INDIA

Historically, public sector undertakings (PSUs) have played an important part in the
development of the Indian industry. At the time of independence, it was felt that political
independence without economic self-reliance would be detrimental to the countrys
sovereignty and autonomy in policy-making (Department of Public Enterprises, 2008).Prior
to Independence, there were few public sector enterprises in the country. These included the
Railways, the Posts and Telegraphs, the Port Trusts, the Ordinance Factories, and All India
Radio, and few enterprises like the Government Salt Factories, Quinine Factories, etc. were
departmentally managed (Narain, 1994). At the time of independence, India was basically an
agricultural economy with weak industrial base, low levels of savings and investment and
lacks infrastructure. A vast majority of population was extremely poor. There were
considerable inequalities in income, employment opportunities were low, serious regional
imbalances were noticeable in economic attainments. It was felt that if the country was to
speed up its economic growth and maintain in the long run at a steady level, a big push with
state initiative as an essential pre-requisite (Gupts, 1975). Private enterprises lead to vast
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inequalities in the distribution of wealth which are not desirable on social grounds and also
on economic grounds to the extent they are result of unearned incomes (Trivedi, 1986).
Public sector enterprises have been playing a dominant and unique role in industrial
growth and development of Indian economy. In order to dismantle the accumulated problems
of unemployment, disparities of rural and urban, inter-regional and inter-class disparities and
technological backwardness and to set up a socialistic pattern of society in the country,
establishment of public enterprises have been conceived (Reddy, 1994). In view of this type
of socio-economic set up, Indian visionary leaders drew up a roadmap for the development of
Public Sector as an instrument for self-reliant economic growth. This guiding factor led to the
passage of Industrial Policy Resolution of 1948 and followed by Industrial Policy Resolution
of 1956.
Pandit Jawaharlal Nehru laid the foundations of modern India. His vision and
determination have left a lasting impression on every facet of national endeavour since
Independence. It is due to his initiative that India now has a strong and diversified industrial
base and is a major industrial nation of the world. The goals and objectives set out for the
nation by Pandit Nehru on the eve of Independence, namely, the rapid agricultural and
industrial development of the country, rapid expansion of opportunities for gainful
employment, progressive reduction of social and economic disparities, removal of poverty
and attainment of self-reliance remain as valid today as at the time Pandit Nehru first set them
out before the nation. Any industrial policy must contribute to the realisation of these goals
and objectives at an accelerated pace (Rao, 1979).
In 1948, immediately after Independence, GOI introduced the Industrial Policy
Resolution. This outlined the approach to industrial growth and development. It emphasised

the importance to the economy of securing a continuous increase in production and ensuring
its equitable distribution. The Industrial Policy Resolution, 1948 laid down that the
manufacturer of arms and ammunition, the production and control of atomic energy and
ownership and management of railway transport should be the exclusive monopoly of the
central government. By doing so, it has sown the seeds for the growth of public sector
(Planning Commission of India, 1951). Owing to the small size of the First Plan, insufficient
funds and greater urgency of agriculture development because of serious shortages of food,
the First Plan did not make any big provisions for industrial development. However, it aimed
at building up the basic services like power and irrigation so that industrialization may be
facilitated. The Public Sector Outlay on Power, Transport communication and Industry were `
Rs. 260 crores and Rs. 120 crores respectively (Chalam, 1988).

After the adoption of the Constitution of India and the socio-economic goals, the
Industrial Policy was comprehensively revised and adopted in 1956. To meet new challenges,
from time to time, it was modified through statements in 1973, 1977 and 1980. The Second
Five Year Plan envisaged the public sector in accordance with the socialist pattern of society
as the guiding political philosophy. Further, the public sector is expected to work as an
instrument for checking concentration of economic power (Pani, 2011). The Second Plan
argued that India should create a base in heavy industries which was interpreted to include
not just physical assets but also the development of technical manpower (Planning
Commission of India, 1969). Hence, the 1956 Industrial Policy Resolution gave primary role
to the state to assume a predominant and direct responsibility for industrial development. The
Fourth Plan talked about the establishment of a social and economic democracy. It stated the
broad objectives of planning defined in terms of rapid economic development accompanied
by continues progress towards equality and social justice. The Industrial Policy Statement of
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1973, inter alia, identified high-priority industries where investment from large industrial
houses and foreign companies would be permitted.
The Industrial Policy Statement of 1977 laid emphasis on decentralisation and on the
role of small-scale, tiny and cottage industries. Charan Singh, an ardent supporter of the
Gandhian model of economic growth, states that no medium and large-scale enterprise shall
be allowed to come into existence in future which will produce goods or services that cottage
or small-scale enterprises can produce and no small scale industry shall be allowed to be
established which will produce goods or services that cottage enterprise can produce
(Venkitaramanan, 2006). The Industrial Policy Statement of 1980 focussed attention on the
need for promoting competition in the domestic market, technological up-gradation and
modernisation. The policy laid the foundation for an increasingly competitive export-based
and for encouraging foreign investment in high-technology areas. This found expression in
the Sixth Five Year Plan which bore the distinct stamp of Indira Gandhi. It was Indira Gandhi
who emphasised the need for productivity to be the central concern in all economic and
production activities.
These policies created a climate for rapid industrial growth in the country. Thus on
the eve of the Seventh Five Year Plan, a broad-based infrastructure had been built up, basic
industries had been established. A high degree of self-reliance in a large number of items,
raw materials, intermediates, finished goods had been achieved. New growth centres of
industrial activity had emerged, as had a new generation of entrepreneurs. A large number of
engineers, technicians and skilled workers had also been trained. The Seventh Plan
recognised the need to consolidate on these strengths and to take initiatives to prepare Indian
industry to respond effectively to the emerging challenges. A number of policy and
procedural changes were introduced in 1985 and 1986 under the leadership of Rajiv Gandhi
6

which are aimed at increasing productivity, reducing costs and improving quality. The accent
was on opening the domestic market to increased competition and readying our industry to
stand on its own in the face of international competition. The public sector was freed from a
number of constraints and given a larger measure of autonomy. The technological and
managerial modernisation of industry was pursued as the key instrument for increasing
productivity and improving our competitiveness in the world. The net result of all these
changes was that Indian industry grew by an impressive average annual growth rate of 8.5%
in the Seventh Plan period.
Post 1991 a series of initiatives were taken by the GOI towards economic reforms.
GOI gradually disbanded the system of licensing and controls and opened up almost all
sectors of economy to private investment, including foreign private investment. With the
opening of Indian economy in early 90s, private sector started operations in almost all sectors
of economy that were earlier reserved for CPSEs. Post 1991, private sector has grown at far
rapid rate than the Public Sector. With the entry of MNCs, the rate of growth of private sector
further increased. This growth in private sector has led to large demand for technical and
managerial talent from the private sector.

GLOBAL PERSPECTIVE
The concept of Public Sector Enterprises germinated around Great Depression and came in
full bloom by the World War II. When the countries headed by the Soviet Union formed the
communist bloc, thereby giving birth to the centrally planned economy. While Karl Marx
was laying the foundation of a socialist system, the capitalist system failed to respond to the
needs of the people during the great depression of the 1930s and thus opened the eyes of the
economists and statesmen to it intrinsic weaknesses (Rangarajan, State and Market, 2003).

The rapid shrinking of colonial rule at almost the same time helped the emergence of the
concept of mixed economy.
The Fifties were probably the heydays of government intervention. One can discern
three streams of thought and developments culminating in this situation. The first was clearly
the process of putting Keynesian macroeconomics into action. The second was the success
story of the command economies under the socialist regimes of the USSR and Eastern
Europe. The third was the birth of planning in the newly independent third world economies
(Department of Disinvestment, 2001). Thus, Britain nationalised its core industries, such as
coal mines, iron and steel, electricity, gas, ports and shipbuilding. In post war France, the
economy was divided into three segments the private, the controlled and the nationalised.
Public utilities, core and strategic sectors, telecommunications, airlines, and automobiles
were all either nationalised or brought under majority ownership and control. In the
developing countries too, public sector came to acquire a major role. Here, the state
intervention was fuelled by other considerations also. It was thought that the social welfare
objectives could be best achieved through comprehensive state intervention. This trend
continued throughout 60s and 70s, in several countries (Department of Disinvestment, 2001).
The reversal of the trend, pursuant to disenchantment with public sector started in 1970s. It
was observed in many countries that the performance of the public enterprises was far below
the expectations and often worse than that of the private sector. The public sector seemed to
perform well only when protected through government created monopolies, entry
reservations, high tariffs and quotas etc. The problems got further accentuated due to preemption of massive resources by the underperforming public sector which left little money
for more urgent social needs and public welfare. These problems were brought in sharp focus
after the second oil shock of 1979, when it became clear that the experiments with
8

government ownership of commercial activities were not succeeding (Department of

Disinvestment, 2003).
During the 1980s, the disillusionment witnessed in the socialist economies added to
the disenchantment with the public sector in the mixed economies in the world. USSR started
the economic reforms under Perestroika, which swept the economies of Eastern Europe.
China also introduced far reaching economic reforms and it was recognized that public sector
did not optimise efficiency and productivity of capital. It was realized that the large number
of public enterprises working under mixed economies were plagued by over-centralization in
decision-making and excessive bureaucratisation (Department of Disinvestment, 2003). A
new trend of global integration began to emerge and countries all over the world, whether
developed or developing, capitalist or socialist, started undergoing vast economic changes,
witnessed by the decline in the role of the state in commercial activities and increasing
privatisation of state owned enterprises. In 1980s, privatisation had started in real earnest in
several parts of the world. This was facilitated by the gradual integration of the world
economies, which ensured that capital and goods flowed more freely to countries suffering
from lack of resources. Foreign capital became freely available to finance large infrastructure
projects, for want of which the domestic private parties were hitherto unable to come
forward, and state support was necessary. Acceptance of the WTO regime by most of the
countries has since led to gradual abolition of quantitative restrictions and reduction in duties
and removal of restrictions on inter-country trade. As a result, the relevance of the state in
providing resources for various commercial activities and protecting the interests of
consumers has considerably reduced (Ministry of Industry, 1991).

POLICY ON PUBLIC SECTOR

The Industrial Policy Resolution of 1956 has been the guiding factor, which gave the
public sector a strategic role in the economy. Massive investments have been made over the
past five decades to build the public sector. Many of these enterprises successfully expanded
production, opened up new areas of technology and built up a reserve of technical
competence in a number of areas. Nevertheless, after the initial concentration of public sector
investment in key infrastructure areas, Public enterprises began to spread into all areas of the
economy including non-infrastructure and non-core areas.
GOI announced on 24th July 1991 the Statement on Industrial Policy which interalia included statement on Public Sector Policy (Standing Conference on Public Enterprises).
The statement contains the following decisions:
Portfolio of public sector investments will be reviewed with a view to focus the public
sector on strategic, high-tech and essential infrastructure. Whereas some reservation for
the public sector is being retained, there would be no bar for areas of exclusivity to be
opened up to the private sector selectively. Similarly the public sector will also be
allowed entry in areas not reserved for it.
Public enterprises which are chronically sick and which are unlikely to be turned around
will, for the formulation of revival/rehabilitation schemes, be referred to the Board for
Industrial and Financial Reconstruction (BIFR), or other similar high level institutions
created for the purpose. A social security mechanism will be created to protect the
interests of workers likely to be affected by such rehabilitation packages.
In order to raise resources and encourage wider public participation, a part of the
Government's shareholding in the public sector would be offered to mutual funds,
financial institutions, general public and workers.
10

 Boards of public sector companies would be made more professional and given greater
powers.
There will be a greater thrust on performance improvement through the Memoranda of
Understanding (MOU) systems through which managements would be granted greater
autonomy and will be held accountable. Technical expertise on the part of the GOI would
be upgraded to make the MOU negotiations and implementation more effective.
To facilitate a fuller discussion on performance, the MOU signed between GOI and the
public enterprise would be placed in Parliament.

Objectives for Setting up Public Sector Enterprises

The main objectives for setting up the public sector enterprises as stated in the
Industrial Policy Resolution of 1956 were:
To help in the rapid economic growth and industrialisation of the country and create the
necessary infrastructure for economic development;
To earn return on investment and thus generate resources for development;
To promote redistribution of income and wealth;
To create employment opportunities;
To promote balanced regional development;
To assist in the development of small-scale and ancillary industries; and
To promote import substitutions, save and earn foreign exchange for the economy.

ECONOMIC REFORMS IN INDIA

It is well known that from 1951 to 1991, Indian policy-makers stuck to a path of
centralized economic planning accompanied by extensive regulatory controls over the
economy. The strategy was based on an inward-looking import substitution model of
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development. This was evident from the design of the countrys Second Five-Year Plan
(1956-61), which had been heavily influenced by the Soviet model of development (Harris,
1987). Several official and expert reviews undertaken by the GOI recommended incremental
liberalization of the economy in different areas, but these did not address the fundamental
issues facing the economy. Indias economy went through several episodes of economic
liberalization in the 1970s and the 1980s under Prime Minsters Indira Gandhi and, later, Rajiv
Gandhi. However, these attempts at economic liberalization were half hearted, selfcontradictory, and often self-reversing in parts (Venkitaramanan, 2006). In contrast, the
economic reforms launched in the 1990s were much wider and deeper (Wadhya, 1994) and
decidedly marked a U-turn in the direction of economic policy followed by India during the
last forty years of centralized economic planning (Rangarajan, 2011).
The year 1991 is a landmark in the post-independence economic history of India. The
country faced a severe economic crisis, triggered in part by a serious balance of payments
situation. The crisis was converted into an opportunity to effect some fundamental changes in
the content and approach to economic policy (Wadhya, 1994). India suffered a major
economic crisis in 1991, due largely to the effects of oil price shocks (resulting from the 1990
Gulf War), the collapse of the Soviet Union (a major trading partner and source of foreign
aid), and a sharp depletion of its foreign exchange reserves (caused largely by large and
continuing Government budget deficits). The economic crisis led India, under the Indian
National Congress, to cut the budget deficit and implement a number of economic reforms,
including sharp cuts in tariff and non-tariff barriers, liberalization of FDI rules, exchange rate
and banking reforms, and a significant reduction in the GOIs control over private sector
investment (by removing, licensing requirements). These reforms helped boost economic
growth and led to a surge in FDI flows to India in the mid-1990s.
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The 1990s reforms transformed the investment climate, improved business confidence
and generated a wave of entrepreneurial optimism. This has led to a gradual improvement in
competitiveness of the entire corporate sector, resurgence in the manufacturing sector and
acceleration in the rate of investment (Ministry of Finance, 2012). Indias exports began to
climb, its foreign exchange reserves, which for decades had hovered around 5 billion dollars,
rose exponentially after the economic reforms and in little more than a decade had risen to
300 billion dollars. Indian corporations that rarely ventured out of India were suddenly
investing all over the world and even in some industrialized countries. When, in 2009, the
Group of 20 (G-20) was raised to the level of a forum for leaders, India was a significant
member of this global policy group. The globalization of India has given rise to new
opportunities but it has also brought with it new challenges and responsibilities.

STATE LEVEL PUBLIC SECTOR ENTERPRISES

The State Level Public Sector Enterprises (SLPEs) form an important part of state
economies and have played a very important role in the development of different states after
Independence. The Constitution of India has also bestowed the responsibility of infrastructure
sectors, such as, roads, power & energy, irrigation, etc., upon the state governments. Due to
large capital investment required and lack of private initiative, the state governments have
had to step in to set up these infrastructure projects/public utilities in their respective states.
Besides the public utilities, the SLPEs have been set up in areas, such as, mining, public
distribution/trading and marketing, warehousing, tourism, handicrafts and handloom
development, forest and fisheries development, financial services and housing etc. While a
number of SLPEs have been set up as statutory corporations through the Acts enacted in the
State Legislatures, a larger number of them have been set up as joint stock companies under
the Companies Act, 1956. A number of SLPEs in some states have been set as co-operatives
13

under the Societies Act, 1912 with majority shareholding by the state governments (Ministry
of Finance, 2012).
Overview of SLPEs
As per the CAG Reports on various states, there were around 837 working SLPEs in
the country as on 31.3.2007 (Department of Public Enterprises, 2009) (Table 1). The total
investments in all these SLPEs stood at Rs. 3,33,441 crores (as on 31.3.2007). The main
components of this investment have been paid up capital (Rs. 1,15,658 crores) and long term
loan (Rs. 2,17,783 crores); the share of long term loan being 69% of the total compared to
31% share of paid up capital. Investment in SLPEs amounts to 79% of total investment in the
246 CPSEs. The total number of people employed in these SLPEs (> 18 lakh employees),
exceed the total number of employees in CPSEs (15.70 lakh employees as on 31.03.2007).
Table 1 about here

CENTRAL PUBLIC SECTOR ENTERPRISES

There were altogether 248 CPSEs under the administrative control of various
ministries/departments as on 31 March 2011 (Department of Public Enterprises, 2012). Out
of these, 220 were in operation and 28 were under construction. Public sector enterprises
have been set up to serve the broad macro-economic objectives of higher economic growth,
self-sufficiency in production of goods and services, long term equilibrium in balance of
payments and low and stable prices. While there were only five CPSEs with a total
investment of Rs. 29 crores at the time of the First Five Year Plan, there were as many 248
CPSEs (excluding 7 Insurance companies) with a total investment of Rs. 6,66,848 crores as
on 31st March, 2011. A large number of CPSEs have been set up as greenfield projects
consequent to the initiatives taken during the Five Year Plans. CPSEs such as
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National Textile Corporation, Coal India Ltd., (and its subsidiaries) have, however, been
taken over from the private sector consequent to their nationalization. Industrial companies
such as Indian Petrochemicals Corporation Ltd., Modern Food Industries Ltd., Hindustan
Zinc Ltd., Bharat Aluminium Company and Maruti Udyog Ltd., on the other hand, which
were CPSEs earlier, ceased to be CPSEs after their privatization. Along with other Public
Sector majors such as State Bank of India in the banking sector, Life Insurance Corporation
in the insurance sector and Indian Railways in transportation, the CPSEs are leading
companies of India with significant market-shares in sectors such as petroleum, (e.g. ONGC,
GAIL and Indian Oil Corporation), mining (e.g. Coal India Ltd. and NMDC), power
generation (e.g. NTPC and NHPC), power transmission (e.g. Power Grid Corporation Ltd.),
nuclear energy (e.g. Nuclear Power Corporation of India Ltd.), heavy engineering (e.g.
BHEL), aviation industry (e.g. Hindustan Aeronautics Ltd. and Air India Ltd.), storage and
public distribution system (e.g. Food Corporation of India and Central Warehousing
Corporation), shipping and trading (e.g. Shipping Corporation of India Ltd., and State
Trading Corporation Ltd.) and telecommunication (e.g. BSNL and MTNL). With economic
liberalization, post-1991, sectors that were exclusive preserve of the Public Sector Enterprises
were opened to the private sector. The CPSEs, therefore, are faced with competition from
both domestic private sector companies (some of which have grown very fast) and the large
multi-national corporations. The turnover of CPSEs like Cotton Corporation of India, ITI
Ltd., Mazgaon Dock Ltd., MSTC Ltd., STC Ltd., ONGC, Videsh Sanchar Nigam Ltd., and
Bharat Sanchar Nigam Ltd., declined significantly during 2010-11. CPSEs like Air India
Ltd., Bharat Sanchar Nigam Ltd., Mahanagar Telephone Nigam Ltd., Hindustan Photofilms
& Manufacturing Co. Ltd., and Indian Drugs & Pharmaceuticals Ltd., suffered losses during
2010-11.

15

Investment in Central Public Sector Enterprises

The aggregate real investment in CPSEs measured in terms of Gross Block went up
from Rs. 11,29,983 crores in 2009-10 to Rs. 12,63,665 crores in 2010-11, showing an
increase of Rs. 1,3,682 crores or a growth of 11.83 per cent over the previous year. In terms
of share in Gross Fixed Capital Formation (GFCF) of the country, however, the share of
gross block in CPSEs declined over the previous year, which came down from 7.53 per cent
in 2009-10 to 5.76 per cent in 2010-11(Table 2).
Table 2 about here
Growth in Financial Investment
The aggregate financial investment in CPSEs (comprising paid-up share capital, share
application money pending allotment and long term loans) grew from Rs. 29 crores in 5
enterprises in 1951-52 to Rs. 6,66,848 crores in 248 enterprises in 2010-11 (Table. 3).
Moreover, the financial investment during 2010-11 over 2009-10, increased by Rs. 86,064
crores or by 14.8 percent.
Table 3 about here

Aggregate Balance Sheet of CPSEs

Table 4 provides information on sources of funds (capital available and their

utilization (application of funds) by CPSEs at the aggregate level during the last three years.
There was further improvement in 2010-11 as the funds available with CPSEs went up to Rs.
15,79,942 crores in 2010-11 from the earlier levels of Rs. 14,11,184 crores in 2009-10 and
Rs. 12,79,447 crores in 2008-09. While reserve and surplus showed an increase of 9.88 per
cent over the previous year, long term loans increased by 18.29 per cent during 2010-11 over
16

2009-10. In absolute terms, reserves and surplus went up to Rs. 6,65,488 crores in 2010-11
from the earlier levels of Rs. 6,05,637 crores in 2009-10 and Rs. 5,36,212 crores in 2008-09.
Long term loans went up to Rs. 5,09,453 crores in 2010-11 from the earlier levels of Rs.
4,30,669 crores in 2009-10 and Rs. 3,71,384 crores in 2008-09.

In terms of application of funds there was a growth of 11.43 per cent in Gross Block
and a reduction of 3.14 per cent in net current assets in 2010-11 over 2009-10. Financial
Investment by the CPSEs in mutual funds (loans and equity), fixed assets and similar
instruments has had the highest increase of 46.03% under application of funds followed by
increase in Net Block (11.43%) and capitalwork in progress (15.37%). Net current assets
and deferred revenue expenditure and deferred tax assets decreased in 2010-11 in comparison
to the previous year by 3.14% and 13.76% respectively. During 2010-11, accumulated loss of
CPSEs furthermore increased by 4.23% compared to the previous year. There has, however,
been very little change during the three years in respect to the share of Net Block of the total
under application of funds (Table 4).
Table 4 about here
Plan of Investment in CPSEs
A good deal of investment of CPSEs in recent years has been made from internal
resources (IR). Plan outlay in CPSEs constituting internal resources, extrabudgetary
resources (EBR) and budgetary support (BS) showed a continuous increase in absolute terms.
Plan outlay in CPSEs has accordingly gone up from Rs.59189.79 crores in 2002-03 to
Rs.167494.58 crores in 2010-11. The respective shares of IR, EBR and BS have,
nevertheless, undergone a change. The share of IR has increased from 55.51 per cent of plan
outlay in 2002-03 to 64.00 per cent in 2010-11 and the share of budgetary support come
17

down from 8.98 per cent in 2002-03 to 2.46 percent in 2010-11. The share of extra budgetary
resources decreased marginally from 35.51 percent in 2002-03 to 33.54 percent in 2010-11
(Table 5).
Table 5 about here
Investment Pattern in Terms Gross Block
Table 6 below shows groupwise aggregate real investment in CPSEs during the last
two years, as measured in terms of gross block. The share of manufacturing CPSEs in gross
block was the highest at 27.83 percent followed by electricity (25.16%), services (23.20%)
and mining (22.99%). In terms of growth in investment over the previous years, the highest
growth (other than CPSEs under construction) was registered by manufacturing sector
(12.31%) and agriculture sector (8.18%), stood at 11.83 per cent in 2010-11 over the previous
year.
Table 6 about here
Top Ten Enterprises in Terms of Gross Block
Gross block in top ten enterprises amounted to Rs. 8,70,431 crores as on 31.3.2011.
This was equal to 68.88 percent of the total grass block in all CPSEs. Oil & Natural Gas
Corporation Ltd., Bharat Sanchar Nigam Ltd., and NTPC Ltd., are the top three CPSEs
amongst the top ten in terms of gross block during the year 2010 11 (Table 7). The share of
these 3 CPSEs alone was 37.92% of the total gross block of all the CPSEs as on 31.3.2011.
Table 7 about here

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Share of Select Items in Domestic/National Production

Table 8 shows the industries in which CPSEs have a major market share. The CPSEs
continue to have complete monopoly in nuclear power generation. The other sectors (and
industries) where they have a major share in domestic and national output (including imports)
are coal, petroleum, telecommunication, power generation and fertilizers. In comparison to
1998-99, however, the share of CPSEs in these industries has been significantly coming
down over the years (except power generation).
Table 8 about here
Aggregate Profit and Loss of CPSEs
The profits of profit making CPSEs stood at Rs. 1,13,770 crores in 2010-11 compared to
Rs. 1,08,434 crores in 2009-10. The loss of loss making CPSEs on the other hand, was Rs.
21,693 crores in 2010-11 compared to Rs. 16,231 crores in 2009-10. At the aggregate level, the
net profit of all CPSEs (aggregate net profit-aggregate net loss) stood at Rs. 92,077 crores in
2010-11 compared to Rs. 92,203 crores during 2009-10 cognate group. The best results were
achieved by the mining sector with 22.32 percent growth in profit over the previous year. This
was followed by 12.97 percent growth in profits achieved by electricity sector. The services
sector suffered a loss of Rs. 7,639 crores during 2010-11, which was higher than the loss of Rs.
3,279 crores in 2009-10. This was mainly due to the loss suffered by Air India Ltd., in both these
years. In other industries, CPSEs belonging to transport, telecommunication and consumer
goods were equally under stress, and their losses increased during 2010-11. However, the
manufacturing sector, steel, petroleum and textile showed a decline in profits. CPSEs belonging
to medium and light engineering industries, suffered losses during the year in comparison to
profit in the previous year. CPSEs in the chemicals & pharmaceuticals sectors, on the other
hand, reduced their losses during 2010-11.
19

Top Ten Profit Making CPSEs

Table 9 provides the list of the top ten profit making CPSEs. Oil & Natural Gas
Corporation Ltd., NTPC Ltd., and Indian Oil Corporation Ltd., have ranked first, second and
third, respectively, amongst the top ten profit making CPSEs. All the top ten profit making
companies are, more or less same in 2010-11 as in 2009-10 (with ranking slightly changed)
except for Power Grid Corporation that has replaced the Power Finance Corporation.
Table 9 about here
Top Ten Loss Making CPSEs
Table 10 provides the list of top ten loss making CPSEs (exclusive of extra ordinary
items and prior period adjustment). Amongst the loss making companies, Air India Ltd., BSNL
and MTNL, were the top three loss making enterprises during 2010-11. The top ten loss making
Companies covered nearly 92.55% of the total loss made by all the CPSEs (62) during the year.
The top three CPSEs namely Air India Ltd., BSNL and MTNL alone have incurred a loss equal
to 74% of the total loss of all CPSEs in 2010-11. Intense price war and cut-throat competition
from new entrants, increase in salary & wages and increase in operating cost as well as increase
in interest cost contributed to greater losses during the year. While the loss of Air India and
MTNL have gone up by 24% and 54% respectively, the loss of BSNL increased by 145% in
2010-11 over 2009-10.
Table 10 about here
Contribution to GDP
Gross Value Addition by CPSEs
The share of gross value addition in CPSEs (net value addition + depreciation) in GDP
(at current market price) stood at 5.96 per cent in 2010-11 against a share of 6.44 per cent in
20

2009-10. If, however, the under-recoveries of oil marketing companies (amounting to Rs.
37,190 crores in 2010-11 and Rs. 29,951 crores in 2009-10) are included, then the share of all
CPSEs in GDP goes up to 6.45 per cent in 2010-11 and 6.75 per cent in 2009-10.
Components of Net Value Addition
In terms of net value addition (excluding depreciation) generated by CPSEs in 201011, the share of profit was the highest at 31.75 per cent followed by indirect tax and duties
(30.84%), salary & wages (23.20%) and interest payment (9.41%) (Table 11). A comparison
between the respective shares of each of these items during 2009-10 and 2010-11 shows a very
little change during these two years.
Table 11 about here
Contribution to the Central Exchequer
CPSEs contribute to the Central Exchequer by way of dividend payment, interest on
government loans and payment of taxes & duties. There was, however a significant increase
in the total contribution to Central Exchequer during the year, which increased from Rs.
1,39,918 crores in 2009-10 to Rs. 1,56,124 crores in 2010-11. This was primarily due to
increased contribution towards custom duty and excise duty which increased from Rs. 6,896
crores and Rs. 52,627 crores in 2009-10 to Rs. 14,151 crores and Rs. 62,713 crores
respectively in 2010-11. There was significant increase in contribution from corporate taxes
as well, which went up from Rs. 38,134 crores in 2009-10 to Rs. 43,369 crores in 2010-11
(Table 12). There was, however, a decline in other duties and taxes and sales tax and
dividend tax during the year as compared to the previous years.
Table 12 about here

21

Revival of Sick CPSEs

The condition of sick CPSEs (i.e. CPSEs whose accumulated losses have exceeded
their net worth) has been improving over the years. The number of sick CPSEs, which were
105 in March, 2003 came down to 64 in March 2011. The CPSEs were brought under the
purview of Sick Industrial Companies (Special Provision) Act, 1985, which was subsequently
amended in 1991 and made effective from 1992. Out of the 64 CPSEs registered with Board
for Industrial and Financial Reconstruction (BIFR) till 30.6.2011, the BIFR has already
disposed of 48 cases of CPSEs either through sanctioning revival schemes (15 cases), or
declaring no longer sick (2 cases) or dropping due to net worth becoming positive (5 cases)
or dismissing the cases as non-maintainable (4 cases) or deregistered with the cases as nonmaintainable (4 cases) or deregistered with BIFR/ others (2 cases) or recommending winding
up (19 cases) or winding up notice issued (one case). The BIFR is yet to take further view on
16 cases of CPSEs.
The GOI subsequently set up the Board for Reconstruction of Public Sector
Enterprises (BRPSE) in December, 2004 for taking measures to restructure/revive, both
industrial and non-industrial CPSEs. Out of the 43 CPSEs, 13 have been declared as
turnaround companies as they have been in profits (profit before tax) continuously for three
years and more. Up to October 2011, cases of 67 sick CPSEs have been referred to BRPSE,
out of which the Board has made recommendation in respect of 62 cases. Remaining 5 cases
were remitted to the concerned administrative Ministers. Out of these 62 cases, as on
31.10.2011, the GOI has approved revival proposals in respect of 43 cases of CPSEs
(Department of Public Enterprises, 2012).

22

Board Structure of CPSEs

The CPSEs are categorized in four Schedules namely A, B, C and D based on
various quantitative, qualitative and other factors. The pay scales of Chief Executives and of
full time Functional Directors in CPSEs are determined as per the Schedule of the concerned
CPSE.

Proposals

from

various

administrative

Ministries/Departments

for

initial

categorization/up-gradation of CPSEs in appropriate schedule, personal up-gradation,

creation of posts in CPSEs, etc are considered in Department of Public Enterprises (DPE) in
consultation with the Public Enterprises Selection Board (PESB). There are 60 Schedule As,
71 Schedule Bs, 46 Schedule Cs, 4 Schedule Ds and 67 uncategorized CPSEs as on
31.3.2011. One CPSE (THDC India Ltd.) has been upgraded from Schedule B to Schedule A,
one CPSE (Hindustan Prefab Ltd.) has been upgraded from Schedule D to C, one CPSE
(Orissa Mineral Development Corporation) has been categorized as a Schedule B and one
CPSE (Bisra Stone Lime Company Ltd) has been categorized as a Schedule C.
Professionalization of Boards
In pursuance to the policy on public sector enterprises being followed since 1991,
several measures have been taken by the DPE to professionalize the Boards of public
enterprises. The guidelines issued by DPE in 1992 provide for induction of outside
professionals on the Boards of CPSEs as part time non-official Directors. The revised
guidelines provide that the number of functional Directors should not exceed 50% of the
actual strength of the Board of Directors (BOD) and the number of government nominee
Directors on the BOD should not exceed two. In the case of listed CPSEs with an Executive
Chairman, the guidelines provide that the number of non-official Directors shall be at least
50% of the board members. In the case of CPSEs with a Non- Executive Chairman, at least
one-third of the board members will have to be non-official Directors. The Functional
23

Directors including the Chief Executive of the CPSEs are appointed by the concerned
administrative ministers on the recommendation of the PESB. It has been decided that the
candidates from SLPEs and the private sector will also be considered as non-internal
candidates besides the candidates from CPSEs for selection to the post of the Functional
Directors in CPSEs subject to the eligibility criteria (Business Line, 2011). The Standing
Conference of Public Enterprises (SCOPE), an apex organisation of PSUs, has initiated a
move to grade the degree of professionalism of the boards of PSUs, as part of its initiatives to
further professionalize the functioning of PSU boards (Department of Public Enterprises,
2012).
Wages/ Salaries and Employees Welfare
The DPE functions as the nodal department in the GOI, inter-alia, in respect of policy
relating to wage settlements of unionized employees, pay revision of non-unionized
supervisors and the executives holding posts below the board level and executives at the
board level in CPSEs. The CPSEs are largely following the Industrial Dearness Allowance
pattern scales of pay. In some cases, Central Dearness Allowance pattern of scales of pay is
followed in CPSEs.
Employment
As on 31.3.2011, the 248 CPSEs employed over 14.44 lakh people (excluding casual
workers) (Table 13). One-fourth of the manpower belongs to managerial and supervisory
cadres. The CPSEs have thus a highly skilled workforce, which is one of their basic strengths.
Table 13 about here

24

Memorandum of Understanding (MOU) System in CPSEs

The Memorandum of Understanding (MOU), as applicable to public sector
enterprises, is a negotiated document between the GOI and the management of the enterprise
specifying clearly the objectives of the agreement and the obligation of both the parties.
The main purpose of the MOU system is to ensure a level playing field to the public
sector enterprises vis--vis the private corporate sector. The management of the enterprise is,
nevertheless, made accountable to the GOI through promise for performance or performance
contract. The GOI, nevertheless, continues to have control over these enterprises through
setting targets in the beginning of the year and by performance evaluation at the end of the
year.

Performance evaluation is done based on the comparison between the actual

achievements and the annual targets agreed upon between the GOI and the CPSE. The targets
constitutes of both financial and non-financial parameters with different weights assigned to
the different parameters. In orders to distinguish excellent from poor performance during
the year is measured on a 5-point scale (Department of Public Enterprises, 2012) (Table 14).
Table 14 about here
International Operations of CPSEs
The CPSEs are increasingly into international trade in goods and services, which has a
bearing on the balance of payments of the country. During the year 2010-11, as many as 140
CPSEs, out of 220 operating CPSEs, either had foreign exchange earnings (FEE) or foreign
exchange expenditure (FEE). As many as 39 CPSEs are net foreign exchange earners. Out of
these 39 CPSEs, 10 CPSEs, namely, ONGC, VSNL, Air India Ltd., National Aluminium
Company Ltd., Airports Authority of India Ltd., Bharat Heavy Electronics Ltd., Shipping
Corporation of India Ltd., Kudremukh Iron Ore Company Ltd., IRCON International Ltd.,

25

Cochin Shipyard Ltd., and RITES Ltd., earned net foreign exchange of more than Rs. 200
crores during 2010-11 (Department of Public Enterprises, 2012).

CONCLUSION
Public sector enterprises have laid a strong foundation for the industrial development
of the country. Public sector units are the temples of modern India.

Since India's

independence, public sector enterprises have contributed significantly towards the growth of
the Indian economy. All the private companies had either cut down on production or went
slow on their investment plans during the economic slowdown. CPSEs did not cut back on
production and went ahead with their investment plans. Public sector enterprises had helped
the country in maintaining the growth momentum during the economic slowdown. In terms
of corporate social responsibility, the role played by CPSEs was enviable; CPSEs performed
well in terms of resource efficiency.

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Business Line.
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August 25, 2012, from Department of Disinvestment - Ministry of Finance, Govt. of
India: http://www.divest.nic.in/chap2-old.asp
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Govt. of India: http://www.divest.nic.in/chap2.asp
26

5. Department of Public Enterprises. (2007). Mid Year Review of Central Public Sector
Enterprises for 2006-2007. New Delhi: Ministry of Heavy Industries and Public
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11. Harris, J. (1987). The State in Retreat? Why has India Eperienced such Half Hearted
Liberalisation in the 80s? IDS Bulletin, 18(4).
12. Kumar, N. (2000, March 4-10). Economic Reforms and Their Macro-Economic Impact.
Economic and Political Weekly, pp. 802-812.
13. Minhas, B. (1974). Planning and The Poor. New Delhi: S. Chand and Co. Ltd.
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Department of Industrial Policy and Promotion.
16. Narain, L. (1994). Principles and Practices of Public Enterprise Management. New
Delhi: S. Chand and Co. Ltd.
17. Pani, N. (2011, July 07). The Underpinnings of Reforms. Business Line.
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Delhi: Ministry o Finance, Government of India.
27

19. Planning Commission of India. (1969). The Fourth Five Year Plan (1969-1974). New
Delhi: Ministry of Finance, Government of India.
20. Rama Prasad Rao, C. (n.d.). Divestment of Shares in Public Sector Undertakings. New
Delhi: University Grants Commission.
21. Rangarajan, C. (2003). State and Market. The Hindu Survey of Indian Industry 2003, 8.
The Hindu.
22. Rangarajan, C. (2011). Growth and the Challenges Ahead. The Hindu Survey of Indian
Industry 2011, 8. The Hindu.
23. Rao, V. (1979). The Public Sector in Indian Socialism. In P. Brahmananda, D.
Nanjundappa, & B. Narayan, Indian Economic Development and Policy. New Delhi:
Vikas Publishing House.
24. Reddy, P. I. (1994, April - June). Performance Appraisal in Public Enterprises Through
Value Added Approach`. The Journal of Institute of Public Enterprises, 18(3 & 4), 164.
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Issues. In P. P. Arya, Economic Reforms in India: From First to Second Generation and
Beyon (pp. 116-121). New Delhi: Deep and Deep Publications Pvt. Ltd.
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Sector.

Retrieved

August

25,

2012,

from

www.scopeonline.in:

http://www.scopeonline.in/gpolicy.htm
27. Trivedi, P. (1986, November 29). Public Enterprises in India: If not profit the for what?
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Allied Publishers.
28

Table 1: Overview of SLPEs

S. No.
Particulars
2006-07
1. Number of SLPEs
837
2. Investment (in Rs. Crores) 333441
(a). Paid Up Capital
115658
(b). Long Term loan
217783
3. Employment
1871805
Source: Comptroller & Auditor General (Government of India), State Audit Reports,
(Civil / Commercial), Various Issues.
TABLE 2: GROWTH IN REAL INVESTMENT/GROSS BLOCK
Accumulated Gross
Gross Block
Growth over
GFCF^, in the
Gross Block in
Year
Block @ in CPSEs During the year the previous economy during the CPSEs, as of %
(Rs. Crores)
(Rs. Crores)
year (in %)
year* (Rs. Crores) GFCF (3)/(5) *100
(1)
(2)
(3)
(4)
(5)
(6)
2002-03
525301
34903
7.12
584366
5.97
2003-04
596727
71426
13.60
687150
10.39
2004-05
649245
52519
8.80
896774
2005-06
715108
65863
10.14
1109160
2006-07
782668
67560
9.45
1343843
2007-08
862240
79572
10.17
1630513
2008-09
978167
115927
13.44
1838499
2009-10
1129983
151816
15.52
2016186
2010-11
1263665
133682
11.83
2322097
Note: @including capital work in progress: ^Gross Fixed Capital Formation.
*Source Central Statistical Organization.

5.86
5.94
5.03
4.88
6.31
7.53
5.76

TABLE 3: GROWTH IN (FINANCIAL) INVESTMENT #

Particulars
Total Investment (Rs. Crores) Enterprises (No.s)
st
At the commencement of the 1 Five Year Plan
29
5
At the commencement of the 2nd Five Year Plan
81
21
At the commencement of the 3rd Five Year Plan
948
47
rd
At the end of 3 Five Year Plan
2410
73
th
At the commencement of the 4 Five Year Plan
3897
84
At the commencement of the 5th Five Year Plan
6237
122
At the end of 5th Five Year Plan
15534
169
th
At the commencement of the 6 Five Year Plan
18150
179
th
At the commencement of the 7 Five Year Plan
42673
215
At the end of 7th Five Year Plan
99329
244
th
At the commencement of the 8 Five Year Plan
135445
246
th
At the end of the 8 Five Year Plan
213610
242
At the end of 9th Five Year Plan
324614
240
th
At the end of 10 Five Year Plan
420771
247
At the end of first year of Eleventh Five Year Plan
455554
242
At the end of Second Year of Eleventh Five Year Plan
513532
246
At the end of third year of Eleventh Five Year Plan
580784
249
At the end of fourth year of Eleventh Five Year Plan
666848
248
Note: # As in the Balance Sheet (i.e. paid capital +pending share application money + long term loan)
Source: Government of India, Public Enterprises Survey, (2010-11).

29

TABLE 4: AGGREGATE BALANCE SHEET OF PUBLIC SECTOR ENTERPRISES

(in Rs. crores)
Particulars
2008-09
2009-10
2010-11
SOURCES OF FUNDS
(i).Shareholders fund (a+b+c)
822883.24 755752.49 678168.69
a. paid up Capital
155432.62 148367.06 138734.40
b. Share application Money
1962.90
1748.42
3222.01
c. Reserves & Surplus
665487.72 605637.01 536212.28
(ii).Long Term Loans
509452.53 430668.54 371576.04
(iii).Deferred Tax Liability
55047.18 48392.50 49201.20
(iv).other Funds
192559.31 176370.07 180500.80
Total (i+ii+iii+iv)
1579942.26 1411183.60 1279446.73
APPLICATION OF FUNDS
(i).Gross Block
1034059.26 930966.02 815249.32
(ii).Less: Depreciation
500850.17 452459.67 407654.19
(iii). Net Block
533209.09 478506.35 407595.19
(iv).Capital Work in Progress
229605.59 199016.61 162918.03
(v).Investments (financial)
291278.17 199461.75 224286.86
(vi). Net Current Assets
417240.32 430778.50 385644.98
(vii).Deferred Revenue Expenditure 3044.42
3530.29
3694.62
(viii). Deferred Tax Asset
8854.17
7104.87
8118.79
(ix). Profit & Loss Account (DR)
96710.50 92785.23 87188.26
Total (iii to ix)
1579942.26 1411183.60 1279446.73
Note: DR = Debit Balance / Accumulated losses from previous year
Source: Government of India, Public Enterprises Survey, (2010-11).
TABLE 5: PLAN INVESTMENT IN CPSES (2002-03 TO 2010-11)
(in Rs. crores)
Year Internal Resources Extra Budgetary Resources Budgetary Support Plan Outlay
32858.83
21017.05
5313.91
59189.79
2002-03
(55.51)
(35.51)
(8.98)
(100)
31103.29
26855.66
5014.46
62973.41
2003-04
(49.39)
(42.65)
(7.96)
(100)
32222.46
26006.52
5090.24
63319.22
2004-05
(50.89)
(41.07)
(8.04)
(100)
42143.53
35723.30
4271.70
82138.53
2005-06
(51.31)
(43.49)
(5.20)
(100)
58984.57
32676.47
5263.75
96921.80
2006-07
(60.86)
(33.71)
(5.43)
(100)
68140.97
38692.82
2745.80
109579.59
2007-08
(62.18)
(35.31)
(2.51)
(100)
72815.68
75807.99
1629.64
132253.31
2008-09
(55.06)
(43.71)
(1.23)
(100)
84980.15
65633.85
4458.75
155072.75
2009-10
(54.80)
(42.32)
(2.88)
(100)
107199.31
56174.62
4120.65
167494.58
2010-11
(64.00)
(33.54)
(2.46)
(100)
Source: Government of India, Public Enterprises Survey, (2010-11).

30

TABLE 6: PATTERN OF INVESTMENT IN TERMS OF GROSS BLOCK (2009 -10 AND 2010-11)
(in Rs. crores)
Investment in terms of Gross
S.
Growth rate over Gross block as % of total
Block as on
Sector
No
the previous year
(as on 31.03.2011)
31.03.2011
31.03.2010
1. Agriculture
119110
8.18
0.01
0.01
2. Mining
290600
257173
13.00
13.00
3. Manufacturing
351634
306297
14.80
27.83
4. Electricity
317908
283059
12.31
25.16
5. Services
293167
277352
5.70
23.20
CPSEs yet to
6.
10237
5992
70.88
0.81
Commerce Operations
Total
1263665
1129983
11.83
100.00
Source: Government of India, Public Enterprises Survey, (2010-11).
TABLE 7: GROSS BLOCK TOP TEN ENTERPRISES, AS ON 31.03.2011
(in Rs. crores)
S.
Investment in terms of Gross
Share in total Gross Block
CPSEs
No.
Block*
(%)
1. Oil & Natural Gas Corporation Ltd.
195770
15.49
2. Bharat Sanchar Nigam Ltd.
172338
13.64
3. NTPC Ltd.
111026
8.79
4. Indian Oil Corporation Ltd.
105785
8.37
Power Grid Corporation of India
5
76976
6.09
Ltd.
6. Steel Authority of India Ltd.
60489
4.79
7. NHPC Ltd.
39997
3.17
8. Air India Ltd
37337
2.95
9. Nuclear Power Corporation Ltd
37265
2.94
Hindustan Petroleum Corporation
10.
33447
2.65
Ltd
Total Top Ten (CPSEs)
870431
68.88
Total Gross Block
1263665
*Gross Block inclusive of Capital work in progress.
Source: Government of India, Public Enterprises Survey, (2010-11).

S.
No.
1.
1.1
1.2
2
2.1
2.2
2.3
3

100.00

TABLE 8: CPSES SHARE IN DOMESTIC OUTPUT IN SELECT ITEMS

Domestic production /
Total Output by
Share of CPSES to
Output
CPSEs
Domestic Output
Selected Item
Units
1998-99
2010-11
1998-99
2010-11
1998-99
2010 - 11
Coal
Hard Coal (Non
Million
253.326
483.543
223.474
390.219
88.216
80.70
coking Coal)
Tonnes
Millions
Coking Coal
44.414
49.533
37.201
42.496
83.760
85.80
Tones
Petroleum Products @
Crude Oil
MMT
32.7
37.68
29.7
27.90
90.8
74.0
Natural Gas
BCM
27.4
52.22
24.5
25.45
89.4
48.7
Refineries
MMT
68.5
196.5
68.5
115.1
100.0
58.5
Throughput
Power Generation

31

3.1 Thermal
3.2 Hydro
3.3 Nuclear

GWh
GWh
GWh

353662
82690
12015

665008
114257
26266

135423
25339
12015

273775
46049
26266

38
31
100

41.2
40.3
100.0

4
Telecommunication Services
4.1 Wired lines
Nos. (In cr.)
1.78
3.47
1.78
2.87
100
82.70
4.2 Wire Less
Nos. (in. cr)
0.09
81.16
0.09
9.73
100
11.99
4.3 Total
Nos .(in. cr)
1.87
84.63
1.87
12.60
100
14.89
5.
Fertilizers
5.1. Nitrogenous
Lakh MT
100.86
121.57
31.76
31.67
31.49
26.05
5.2
Phosphoric
Lakh MT
29.76
43.23
7.26
2.27
24.40
5.37
Notes: MMT: Million Metric Tonnes, MCML: Million Cubic Metres @Figures repeated for previous year
Source: Government of India, Public Enterprises Survey, (2010-11).
TABLE 9: TOP TEN PROFIT MAKING CPSES 2010-11
(in Rs. crores)
S. No.
Name of the CPSEs
Net profit % share of total Net Profit
1. Oil & Natural Gas Corporation Ltd. 18924.03
16.63
2. NTPC Ltd.
9102.59
8.00
3. Indian Oil Corporation Ltd.
7445.48
6.54
4. NMDC Ltd.
6499.22
5.71
5. Bharat Heavy Electricals Ltd.
6011.20
5.28
6. Steel Authority of India Ltd.
4904.74
4.32
7. Coal India Ltd.
4696.10
4.13
8. GAIL (India) Ltd.
3561.13
3.13
9. Oil India Ltd.
2887.73
2.54
10. Power Grid Corporation of India Ltd. 2696.89
2.37
Total Profit
66729.11
58.65
Net Profit of profit making CPSEs 113769.88
Source: Government of India, Public Enterprises Survey, (2010-11).
TABLE 10: TOP TEN LOSS MAKING CPSES (2010-11)
(in Rs. crores)
S. No.
Name of the CPSEs
Net Loss (% share of total Net Loss)
1. Air India Ltd.
(-) 6865.17
31.65
2. Bharat Sanchar Nigam Ltd.
(-) 6384.26
29.43
3. Mahanagar Telephone Nigam Ltd.
(-) 2801.91
12.92
4. Hindustan Photo Films Manufacturing Co. Ltd. (-) 1156.65
5.33
5. Indian Drugs & Pharmaceuticals Ltd.
(-) 621.83
2.87
6. Hindustan Cables Ltd.
(-) 607.39
2.80
7.
8.
9.
10.

Fertilizer Corporation of India Ltd.

(-) 508.51
Air India Charters Ltd.
(-) 391.22
Hindustan Fertilizer Corporation Ltd.
(-) 382.28
ITI Ltd
(-) 357.75
Total Loss
(-) 20076.97
Net Loss of loss making CPSEs
(-) 21693.31
Source: Government of India, Public Enterprises Survey, (2010-11).

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2.34
1.80
1.76
1.65
92.55
---

TABLE 11: COMPONENTS OF NET VALUE ADDITION IN CPSES

(in Rs. crores)
S. No.
Net Value Addition
2010-11 Share (%) 2009-10 Share (%)
1. Profit before Tax& EP (PBTEP)
131627
31.75
123951
33.12
2. Interest
38997
9.41
36059
9.63
3. Indirect Taxes & Duties (net of subsidies) 127861
30.84
109854
29.35
4. Salaries & Wages
96210
23.20
87792
23.45
5. Rent, royalty and Cess
19919
4.80
16647
4.45
Total
414614 100.00 374303 100.00
Source: Government of India, Public Enterprises Survey, (2010-11).
TABLE 12: CONTRIBUTION TO THE CENTRAL EXCHEQUER (2008-09 TO 2010-11)
(in Rs. crores)
S. No
Particulars
2010-11 2009-10 2008-09
1.
Investment in CPSEs
2. 1.Divided
21900.70 19910.59 19387.36
3.
4.
5.
6.
7.
8.
9.
10.
11.

2.Interest
501.77
387.44
558.79
Total (1)
22402.47 20298.03 19946.15
Taxes and Duties (Central)
1.Excise Duty
62713.29 52627.02 63261.89
2.Cutoms Duty
14151.23 6896.04 8704.53
3.Corporate Tax
43369.31 38133.97 35338.55
4.Dividend Tax
5140.02 9501.08 4211.67
5.Sales Tax
2312.68 2665.58 2546.79
6.Other Duties & Taxes 6035.49
9796.2 17533.62
Total (II)
133722.02 119619.89 131597
Grand Total (I+II)
156124.49 139917.92 151543.20
Source: Government of India, Public Enterprises Survey, (2010-11).
TABLE 13: EMPLOYMENT AND AVERAGE ANNUAL EMOLUMENTS
Employees ( In Lakh) (Excl. casual & Daily
Total Emoluments Per Capita Emoluments
Year
(Rs.)
rated workers)
(Rs. in Crores)
2006-07
16.14
52586
325869
2007-08
15.65
64306
410898
2008-09
15.33
83045
541716
2009-10
14.90
87792
589210
2010-11
14.44
96210
666276
Source: Government of India, Public Enterprises Survey, (2010-11).
TABLE 14: SUMMARY OF THE PERFORMANCE OF MOU SIGNING CPSES (NUMBERS)
Rating 2006-07 2007-08 2008-09 2009-10 2010-11
Excellent
46
55
47
73
67
Very Good 37
34
34
31
42
Good
13
15
25
20
24
Fair
06
08
17
20
24
Poor
00
00
01
01
02
Total
102
112
124
145
159
Source: Government of India, Public Enterprises Survey, (2010-11).

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